Building trust for foreigners in China

Pedagogy & Research

06/11/2018

Jingjing Yao

Based on an interview with Jingjing Yao (February 2018) and on his article “Understanding the trust deficit in China: Mapping positive experience and trust in strangers”, co-written with Zhi-Xue Zhang, Jeanne Brett and J. Keith Murnighan (Organizational Behavior and Human Decision Processes, 2017).

In China, there has traditionally been a cultural tendency towards distrust of strangers. This cultural trait may potentially hinder economic development when it comes to business transactions with foreign companies. By understanding the peculiar way social networks function in China, however, a team of researchers reveals a surprisingly easy way to bridge the trust gap.

In the West, the early bird gets the worm. In China, the first bird out gets shot. The West values boldness, China, cautiousness. The Chinese aversion to risk is also visible in a general distrust of strangers. After all, trust is a willingness to be vulnerable, to be potentially betrayed by the other party. A 2014 large-scale social survey, The Blue Book of Social Mentality, found that less than half of respondents felt that “most people can be trusted” while only about 30 percent trusted strangers. “From my own observations, newspapers and academic literature, there is a sense that the Chinese don’t place trust easily. It’s very prevalent,” says Professor Jingjing Yao. He and his co-authors define strangers according to a crucial Chinese concept, that of guanxi. Guanxi is an informal relationship between individuals linked by social norms that govern mutual commitment and loyalty. “It creates a strong boundary between family or friends, and those with whom you have no connection and are categorized as strangers, between ingroup and outgroup,” he explains.

Trust as a foundation for business

Needless to say, foreign businesspeople trying to break into Chinese markets fall into the “stranger” category. Lack of trust could thus be a major obstacle to China’s continued international economic development, especially as the interactions between Chinese and foreign businesspeople are only likely to increase as the global marketplace evolves. US scholar Francis Fukuyama even argues in his book, Trust: The Social Virtues and the Creation of Prosperity, that trust is the most pervasive cultural characteristic influencing a nation’s prosperity and competitiveness. Fukuyama contrasts the economic success of such “high-trust societies” as Japan and Germany with the rigidities of “low-trust societies” such as China, suggesting that there is a virtually unbreakable boundary between ingroups and outgroups in China. But Professor Yao argues that the elastic nature of guanxi could reshape this boundary.

Building trust through positive experiences

According to Professor Yao, the good news is that distrust can be overcome through positive experiences with “outgroup members”, or strangers. Those initial positive experiences create a virtuous circle, encouraging more positive interactions with strangers moving forwards. The researchers draw upon intergroup contact theory, which posits that positive experiences contradict – and so allow people to correct – negative views and reduce prejudice. They cite the example of friendships between gay and straight men found to reduce homophobic attitudes. In a business context in China, a foreign partner granting a favor, for example giving access to a more mature global market, could help change perceptions of foreigner trustworthiness. Most importantly, the positive perception does not apply exclusively to the partner who did the initial favor, but potentially to a third party, or foreign businesspeople in general. In Professor Yao’s words, “It can be generalized to all foreigners, meaning the Chinese businessman may later, in turn, help a partner from a different country.”

Changing perspectives one story at a time

Exchange of behaviors between three (or more) parties is called indirect reciprocity. It is what mediates the relationship between positive outgroup, or stranger, experiences and a person’s trust in strangers. While lots of academic literature already documents trust, Professor Yao and his co-researchers identify this precise psychological mechanism. They support their hypothesis with a series of studies in which participants were primed with narratives about positive ingroup and outgroup experiences, or took part in online games involving money sharing, then used attitudinal measures or behavioral indicators to assess their trust in unfamiliar assigned teams or partners. In all four experimental settings, the effect of positive outgroup, or stranger, narratives was significant. “Even exposing the participants to just a story – one featured a boy asking for help from an unknown passerby to shore up a dike and protect the village from flooding – triggered a change in perception,” says Professor Yao.

Practical applications

First of all, Professor Yao cautions, foreigners must understand the ingroup-outgroup mentality in China: “Don’t panic, it’s normal to be treated like an outsider at the very beginning.” To gain trust, he recommends offering favors as a way to generate the positive experiences that will overcome the cultural distrust of foreigners in China. “If you offer something (help), and the recipient feels grateful, then guanxi means they will have an obligation to return the favor, and that’s how you start building something,” he explains. Still, he warns that there is no absolute answer, because China is so huge and diverse. “The story is different in Beijing and in Shanghai, and again in open, US-style cities like Shenzhen, as well as depending on the industry.”

Biography

Jingjing Yao is Professor in international negotiations at IÉSEG School of Management (Lille). He obtained his Ph.D. in Organization Management from Guanghua School of Management at Peking University in 2015.

Methodology

The researchers assessed the effects of three different positive experiences (perceived support, help and trusting behavior) on people’s trust in strangers. They used four experimental settings with Chinese participants, then used secondary data from a survey in China to examine the effects of ingroup versus outgroup experience on trust in strangers.